Wall Street's Race to the 48-Millisecond Trade

August 15, 2012

By Eric Owles, The New York Times Dealbook

It took just 45 minutes this month for one of Wall Street’s top trading firms to lose $440 million, a loss that has focused attention on the potential problems associated with high-speed trading. Yet today’s technological challenges are not unlike those faced by traders in the 19th century, whose jobs were revolutionized by the advent of ticker machines...

In 1867, Edward A. Calahan, a draftsman with the American Telegraph Company who previously worked as a messenger on Wall Street, unveiled the first stock ticker. The device, which earned its name from the unique sound it created, featured two wheels of type placed under a glass jar. The ticker printed off company names and stock prices on a narrow strip of paper, which was read aloud by a clerk.

Mr. Calahan’s machine was the first step in a major technological revolution of Wall Street, but it was also slow and unreliable. Twice a week, the batteries had to be filled with sulfuric acid, which was carried around in buckets. More important, the wheels of type would not always print in unison resulting in a mash of letters and numbers.